Steel prices rangebound in India amidst increasing import worries

In February, India's steel mills continue raising prices despite robust domestic demand, with the benchmark price for hot rolled coil ranging from ₹54,000 to ₹54,500 per tonne. Additionally, several mills have announced discounts of about ₹2,000 per tonne. At the trade level, prices were set by need-based purchasing as well as the growing availability of less expensive options (imports).

As per market sources, HRC prices hovered around ₹53,900 per tonne levels in early February trade, down or flat over January exit prices; but slowly stabilised at ₹54,000–54,500 per tonne levels by the second week of the month, indicating a 0-1% over January. However, HRC prices continued to be lower than December, where it hovered at ₹55,000 per tonne range and exited into January at ₹54,900 per tonne.

In case of the cold rolled coils (CRC), the trade level prices remained at ₹62,000 per tonne levels in February, almost at par with January prices. Prices saw a ₹300 per tonne decline over December, less than 1% decline.

Prices of rebar, mostly used in construction activities, stood at ₹49,250 per tonne, same as January-exit prices. On the other hand, prices saw a 1% decline over December prices of ₹49,500 per tonne.

BigMint’s (formerly SteelMint)benchmark assessment was about ₹53,500-54,500 per tonne, ex-Mumbai, while CRC prices stayed unchanged at ₹61,500-62,500 per tonne.

Rebates

Market sources said, PSU-major SAIL announced price hikes for flat steel prices and also for HRCs for February 2024 sales, with prices hovering in the ₹55,500-56,000 per tonne range. However, the mill has announced a rebate of ₹2,000 per tonne too.

BigMint in a recent report added that rebates offered by private mills were in the range of ₹2,000–2,500 per tonne.

Increased price levels of raw material is seen as the prime reason behind this hike. Globally, steel prices have seen a slight uptick in China, Vietnam and Europe.

Market Sentiments

Trade market sentiments have remained subdued, sources said. In majority of markets there is need-based buying. “Domestic HRC prices remain high, deterring buyers amid elevated inventories and weak demand,” BigMint said in its report. This apart, there continues to be sustained import activity even in February thereby making cheaper alternatives available.

Export prices have also remained range-bound for West Asia at around $600-635 per tonne levels, depending on the region where the shipments were sent. Against this, Chinese HRC prices were around $605–610 per tonne.

In Europe, Indian HRC exports was $715-720 per tonne.

As per Steel Ministry data, crude steel production saw a 13% increasey-o-y in April–Jan period to 113.85 million tonnes (mt) while it stood at 101 MT in the year-ago-period. Against this, consumption stood at 112.42 MT, indicating a near 15% increase for the period under review. Consumption stood at 98.3 MT for the same period last fiscal.

India was a net importer of steel, by 1.3 MT for the period, with imports being at 6.8 MT and exports at 5.5 MT.